Law firms change from lay-offs to compensation and training

FiredToday's market: protect yourself - get the training you need to keep your job and get top salary

At least people have stopped crouching behind their desks in an effort to hide from the Pink Slip Lady. That's according to a recent survey from ALM Intelligence, "Turf Wars: Defining New Roles and Competing for New Territories."

The recent report provides an overview of current staffing issues affecting AmLaw 200 law firms, the largest law firms in the U.S. The report is based on a survey of partners, associates, paralegals, support staff and law firm administrators.

The survey found that the top three factors currently working against overall law firm morale are: too much “deadweight” in the firm (34 percent); compensation too low compared to other firms (31 percent); and too much work for current staffing levels (31 percent).

“This is a dramatic change from our 2011 survey, when the top three factors cited as having a negative impact on morale were layoffs, bonus cuts and low compensation,” said Kevin Iredell, vice president of ALM Legal Intelligence.

The survey found that, in the coming year, 62 percent of firms are likely to be hiring new attorneys. However, 49 percent plan to reduce support staff, continuing a trend in recent years as firms strive to better leverage technology for greater operational efficiencies.  

The survey cites getting rid of deadweight; compensation too low and too much work for staff efficiencies.  Why 49% of the firms want to get rid of paralegals when there is too much work is a bit much.  However, perhaps  instead of getting rid of deadweight, these firms willl be smart enough to exchange deadweight for more productive support staff.

Let's clear some of this up.  What's going on is the traditional paralegal is going away and is being replaced by paralegals who are proficient in technology and are cross-trained in other areas.  Hybrids, some call them.  Someone say, who is a Paralegal/Litigation Support Manager or Paralegal/Records Manager.  Duties the paralegal perform now are being replaced by more sophisticated assignments that require more training outside of paralegal schools.  If you don't want to be replaced by someone who knows what you don't, you'd be smarter to get training now before trouble enters your career.

Other survey findings included the following:

  • In the next three years, significantly more respondents foresee legal process outsourcing growing at their firms (19 percent) than what was reported in 2011 (10 percent).  [This is due to technology.]
  • In the past year, nearly half of responding firms (47 percent) have promoted associates to Of Counsel, rather than to an equity partner position. [Stop with splitting the profits already.]
  • Law firms’ biggest challenges when it comes to staffing requirements are hiring (27 percent) and retaining key talent (26 percent).  [Treat everyone right, pay them decent salaries and remember that staff/paralegals are smarter than the average worker.  They'll stay.]
  • The top three qualities law firms look for when hiring new associates is practice expertise (29 percent), followed by Ivy League or top law school graduation (26 percent) and GPA (16 percent).  For more information, go to www.alm.com/about/pr/releases/survey.

How do these statistics relate to paralegals?  You will need to have top education, primo expertise and plenty of motivation on a regular basis to move your career forward. It's the way of things now, folks.......Ride the horse in the direction it's going.

 

 

 

 

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"Job satisfaction is high in the paralegal field"

Another gem of an article from LawCrossing which reports very good news for paralegals:

"Many paralegals entering the workforce these days have high expectations. Steady salary increases, expanded workplace challenges, and broad benefits packages all contribute to robust paralegal employment opportunities and job satisfaction.

"The paralegal profession is hailed as being one of the fastest-growing industries of the 2000s, and according to an NFPA compensation and benefits survey, paralegals seem to enjoy their work. Nearly half of those surveyed rated their job satisfaction as high or very high. Only a small number (10%) of paralegals rated their job satisfaction as being low, and an even smaller number (3%) deemed it very low. There are fewer experienced paralegals switching jobs, supporting the notion that most seem to be happy with their current employment situations."

Be sure to check out the hepful links at the end of this article...


"Male Paralegals: Is There Really a Glass Elevator?"

Very interesting question raised on LawCrossing. Diversity in the workplace is good, right?

"It is not uncommon these days to see more men doing traditionally female jobs such as teaching preschool and kindergarten and working as librarians, legal assistants or paralegals, bank tellers, speech pathologists, secretaries, data-entry workers, nurses, or even maids. According to the Bureau of Labor Statistics, in 2005, 13.7% of paralegals were men. In 2004, the percentage was barely 11%.

"Experts who study the labor market have hypothesized that an unstable job market may lead more males to seek employment in alternative careers. And does that come as a surprise? Women who cross into traditionally male-dominated professions often do so for financial reasons and end up earning bigger paychecks than they would in traditionally female jobs.

"Men who do the reverse may not be rewarded with larger salaries, but they may find more job security. Additionally, men are frequently able to advance further and faster in traditionally female jobs than their female counterparts. This is what is sometimes known as the glass-elevator [or escalator] effect [PDF].

"Howard Lee is a legal assistant at law firm Allen, Allen, Allen & Allen in Richmond, VA. He said that he feels being a man in a traditionally female profession has its benefits.

"'I feel [male] paralegals have great chances of securing final interviews and, ultimately, job placement,' said Lee. 'Many HR departments are trying to get more diversity in the paralegal workforce.'"


"Firms Predict More Work, Less Equity"

What does this news mean for paralegals? I'm guessing higher required billable hours & maybe higher salaries too:

"Although law firm leaders at a recent conference publicly pooh-poohed predictions that industry profitability would stumble, in a new survey they say increasing expenses will cut into their bottom line this year.

"Lawyers can expect to be pushed for more billable hours while facing a harder struggle to make equity partner. And the ranks of associates and nonequity partners will rise much faster than any increase in equity slots, law firm leaders said.

"The first managing partner confidence index [be sure to check the comments to this post!] -- a survey of more than 100 Am Law 200 firm leaders -- was released this week by Citigroup Private Bank, which serves as banker to 550 law firms, including many of the nation's largest.

[snip]

"Am Law 200 firms reported big growth last year. But while most respondents predict revenue will continue to climb, they also expect expenses -- led by lawyer salaries -- to do the same. More than 90 percent said lawyer salaries would be the primary rising cost this year -- and that was before the recent round of associate salary raises that brought first-years up to $160,000 in New York and $145,000 most everywhere else.

[snip]

"Non-lawyer staff salaries and real estate costs are also expected to grow at a faster clip [emphasis added] than last year, [Danilo DiPietro, client head of Citigroup's law firm group] said."


"Too Many Laws, Not Enough Lawyers"

I'm thinking this article means it might be a good time for SOX paralegals to seek raises:

"With business booming at the nation's law firms, the fees they charge will climb steadily. Expect the cost of corporate legal services to continue to increase an average of one and a half times the rate of inflation in coming years. The trend will vary widely by region, with the largest jumps likely in major metropolitan areas.

"What's fueling demand? The explosion of new corporate compliance regulations, spawned in large part by the Sarbanes-Oxley reform law, means businesses have a lot more legal paperwork. Merger mania is also keeping lawyers busy as companies buy and sell one another at a fast clip. Every corporate deal generates a raft of necessary legal documents. Finally, plain old economic growth is underpinning a natural expansion in the market for legal services. As a result, law firms are averaging a comfortable 10% rate of profit growth [emphasis added] per partner per year."


"Top Law Firms May Face Rough Future"

It's certainly smart to face this possibility now, right? Even if the law biz doesn't cool:

"Will the good times cease to roll for leading law firms?

"With some gloom -- though not so much doom -- industry observers forecasted a cooling of the legal market over the next five years at the Law Firm Leaders Forum, held Thursday and continuing today in San Francisco. Ever-increasing pressure on rates from clients, rising costs, including the recent hike in associate salaries, and segmentation of the marketplace will make it hard for firms to maintain robust growth -- especially of their bottom lines, they said.

"'There are a lot of red flags waving right now,' said Bradford Hildebrandt, a law firm consultant with Hildebrandt International. 'I would be starting to plan for an economic correction.'"


"Classify paralegals as professionals, not administrative staff"

So, is this a welcome statement from Altman Weil & the Law Department Management blog? I think so!

"Classify paralegals as professionals, not administrative staff, so you can pay for appropriate quality

"A good point made by a consultant, James Wilber of Altman Weil, appears in InsideCounsel, Feb. 2007 at 54. Wilber has observed that 'often corporations classify paralegals as administrative staff, with salaries too low to attract highly trained professionals.' He makes the logical recommendation: redesign the salary structure so that paralegal positions – at least senior level paralegals – are in the higher salary band of professionals. Even a few thousand dollars a year more makes a big difference in the quality of paralegal you can then attract." [Emphasis added.]


"What do you put in that 'Salary Desired' box?"

Excellent question! And this blog post has good answers in the form of many [scroll down] helpful reader comments [scroll down]:

"A friend of mine is looking for a new job. She has years of experience in the industry, great technical skills, wonderful contacts, and plenty to brag about. But like most of us, she's stymied when a job ad asks for a cover letter, 'complete with salary history and requirements.' A recent position opening added, 'The salary information is important! If you don't tell us what you want to be paid, we can't tell if we can hire you.'

[snip]

"Personally, I've never found a good way to respond to those 'salary expectations' requirements. What have you done?

[snip]

Comment by reader MGS:

"This can be a difficult question to answer and can have a variety of results such as:
- Not getting an interview (salary too high or too low).
- Getting a salary offer that is too low or that is lower than direct reports or others in the same type / level of a position.
- Getting a much higher salary

"I do not mind giving my salary expectations; in general I keep this somewhat generic: 'I expect to be paid in line with what others in a similar position and similar company are earning, adjusted for my experience, expertise, and educational level.' An acceptable salary also depends upon the expectations, so a $100k job working 40 hours per week is much better than a $100k job working 80 hours per week."


"Increase Your Salary in 2007"

Here are "10 Expert Tips" on getting a higher salary from PayScale, provider of "global online compensation information":

"Determined to increase your salary in 2007? Follow these tips from Reesa Staten, vice president of communications and director of research at recruiting firm Robert Half International and Anna Ivey, a Boston-based career and admissions counselor, to increase your salary this year:

1. Get comfortable negotiating salary raises.
"'Women fall behind here, because they generally aren’t as aggressive and fall farther and farther behind with their salaries. You can’t be shy about asking to be paid what you’re worth,' Ivey said. Along these lines, she said, it’s important to keep detailed documentation of your achievements.

[snip]

9. Sharpen your communication skills.
"'I don’t care what role you’re in. If you can read and speak well, you are way ahead of the pack,' Ivey said."

Good luck making a case for your well-deserved raise!


Paralegals miss out on 15% Christmas bonus

Not expecting much holiday cheer at this firm's year-end parties!

"Paralegals and professional support lawyers at Slaughter and May will receive a bonus this year of just 3%, despite the rest of the lawyers at the firm pocketing a 15% boost under the firm’s recently introduced scheme.

"Slaughters’ new system will see a flat-rate bonus of 15% of salary paid to all fee-earners; however, paralegals and professional support lawyers are not included in this category. The magic circle firm confirmed they will receive just a fifth of this amount, taking home just 3%."

Click here to explore what this London firm (founded 1889) looks for in paralegals. Just don't expect much of a bonus...